Definition: Rensis Likert along with his associates in Michigan University, USA conducted research to study the patterns and styles of managers over three decades, across 200 organizations and developed a four-fold model of the management system that helped in understanding the leadership behavior.
Likert’s four systems of management are categorized as follows:
- Exploitative Authoritative System: In this type of management system, the responsibility lies with the people in higher positions in the hierarchy. Here, the subordinates are not involved in the decision-making process. The superior has no trust and confidence in his subordinate and imposes decisions on him leaving no room for further discussions.In this system, the communication flows downwards, i.e. from the superior to the subordinate and hence there is a lack of communication and teamwork. The management is only concerned with the completion of work; it uses any means or threats to get the work completed through the subordinates.
- Benevolent Authoritative System: Like exploitative authoritative system, here also the responsibility lies with the people at the upper echelons of the hierarchy and the only difference is that the motivation is based on the rewards, not on fear and threat. The superior has that much trust and confidence in his subordinates which is required in a master-servant relationship.In this system, the subordinates are given rewards for their participation and the communication may flow upwards i.e. from subordinate to superior, but restricted to what the superior wants to hear. Thus, in the benevolent authoritative system also, the subordinates do not feel free to discuss job-related issues with the superior. This results in the lack of communication and a little teamwork.
- Consultative System: In this management system, the superior has substantial but not complete, trust and confidence in his subordinates and constructively uses the views and opinions given by them. Here, the motivation is based on rewards and the amount of the individual’s involvement in the decision-making process.The consultative system is characterized by a great flow of information both horizontally and vertically. The subordinates feel free to discuss job-related issues with the superiors and hence, the upward flow of communication is more into the consultative system than a benevolent system. But still, the decisions are made by the senior people in the hierarchy.
- Participative System: In the participative system, the management has full confidence in his subordinates and encourages them to participate actively in the decision-making process. Here, the subordinate feels absolutely free to discuss any issue related to a job with his superior. This system is characterized by a good teamwork and teams are linked with people, who are the members of more than one team and such people are called as “linking pins”. The subordinates get motivated through rewards for their participation in the decision-making process.
With these four systems of management, Likert studied seven variables Viz. Leadership, motivation, decision-making process, communication, interaction-influence, control process and goal setting.